Morneau Says Hard-Hit Alberta May Get Federal Relief

OTTAWA — The Liberal government has confirmed that Alberta may qualify for a financial boost under a little-known federal program to help ease the province's economic pain from falling commodity prices.

As The Canadian Press reported Thursday, the province could be eligible for payments under the fiscal stabilization program, Finance Minister Bill Morneau acknowledged during question period.

Provinces can make claims under the program when their revenues tumble by more than five per cent from one year to the next.

The Alberta government has projected a double-digit decline in revenues in 2015-16 due to the steep slide in resource prices.

"I spoke yesterday with the Alberta minister of finance to see how we could work together and I'm pleased to say that he understands that there's a stabilization fund that Alberta can apply for,'' Morneau said Friday.

"The potential is up to $250 million. Should they apply, we would work expeditiously to move forward on that request.''

Payments from the program were capped in the late 1980s at $60 per provincial resident. Alberta's population is about 4.1 million.

Alberta Finance Minister Joe Ceci told CP earlier this week that he was looking forward to a discussion with Morneau about possible federal help for the province's finances.

He didn't get into the details, but when asked whether he might ask the federal government for a loan, he replied: "Yeah, potentially.''

Ceci said he would also like to see Ottawa speed up promised infrastructure investments and provide more support for getting pipeline access to tidewater.

Last fall, the Alberta government projected its revenues would sink 11.5 per cent from 2014-15 to 2015-16. Experts say it could end up worse than that because oil prices have continued to drop.

"Albertans are hurting,'' Ceci said.

A senior federal government source, speaking on condition of anonymity, said a fiscal-stabilization payment was just one of several possibilities Ottawa is exploring as it scrambles to find ways to help the hard-hit province.

In preparation for the spring budget, the federal government has also instructed bureaucrats across many departments to generate "innovative ideas'' that could help provide specific relief for the Alberta economy, said the source, who wasn't authorized to disclose details publicly.

Alberta's woes are "dragging down the entire Canadian economy,'' the source warned.

Potential solutions being bounced around include fast-tracking infrastructure spending and tweaking the usual, per-capita infrastructure funding disbursement formula to reflect economic need, the source noted. Another idea being examined is a boost to direct transfers to individuals, perhaps through modifications to the employment insurance program.

Alberta's woes are "dragging down the entire Canadian economy.''

The Liberal government pledged to enhance EI during last fall's election campaign and Prime Minister Justin Trudeau has vowed to inject an additional $60 billion over 10 years into infrastructure projects. Only $17.4 billion of it, however, was earmarked to flow during the Liberals' first mandate.

Trudeau is scheduled to visit Alberta next week. The Liberals made an electoral breakthrough in October by capturing four ridings in the province. Before that, the party had been shut out there since 2004.